Why Google Wallet Won't Work
googlewatch.eweek.com
googlewatch.eweek.com
Depth of penetration is far more important than breadth. Ten thousand users in a single city is better than a million in a thousand. In order to be viable for point of sale, you have to give corner stores and drycleaners a reason to use your service, which means that their average customer has to want to use it. Sure, you can kickstart the process with big box retail chains, something that a company the size of Google is well-placed to do, but you'll never be dominant until you own the mom and pops. Without the ubiquity of credit cards, replacement mobile payments are at best a neat feature.
The author's second point ties into the first, and is equally valid. There is no discernible reason why Google would limit itself to a single credit card provider, unless that was their only option. All this will do is hurt uptake. The same is true of limiting it to a single phone.
Google needs to learn the Wave lesson, and go big or go home. By so meekly backing Wallet, they are all but ensuring its failure. This is no Android: it doesn't fix any big problem for any major player the way Android solved the OS and marketplace problem for the handset makers. Square works great for small businesses, especially those who provide on-site service. Wallet doesn't seem to provide any solutions beyond "paper and plastic are anachronistic". They really need to identify who their early adopters are going to be and launch a concerted effort to convert them. Short of that, it's another in a long line of half-assed product rollouts from Google.
Do you really feel that Wave failed because they didnt "go big"? If anything, thats what they DID do. They released a product with so much fanfare that lack clearly defined use cases. Wallet was /just/ announced. its not even a beta product yet. They need time to test out locations with a mostly staff lef trial period in very select locations. They have announced that they want it to do everything from debit cards to airline and concert tickets.
There is a chicken and egg issue here. Companies need to have readers in order for people to actually use it, and people need to actually use it in order for most companies to want to get setup with it.
>>They really need to identify who their early adopters are going to be and launch a concerted effort to convert them
I would say that launching on an offical Google phone in San Francsico and New York would be as close to launching for early adopters as one can get. This /is/ an early adopters product for now, and will be for a while. But you don't need to convert them - they are the adopters all ready. You need to convert moms. They won't do this until it is very easy to use and known to be very secure. How else to do this then a small release amongst high-tech savvy users in larger cities.
>>Short of that, it's another in a long line of half-assed product rollouts from Google.
I don't feel that people understand what this product means for Google. Lest we forget they are an advertising company. What more rich a source of pointed advertising information than the exact purchases of their user? Barring some horrific publicity ala Buzz, they are going to sink WAY more resources into this one mobile product than they would short of android itself.
Wallet does have a clearly-defined use case, however. A small initial rollout is good if done well. Limiting it to one phone, on one credit card, in a large area, with no major deals with retailers, just doesn't seem like a winning strategy. As I detailed above, a limited rollout is fine if it's a small-scale version of your intended usage. Get everyone in a small area using it, then expand from there.
>How else to do this then a small release amongst high-tech savvy users in larger cities.
Everyone in a small area. Even in the Bay Area, tech-savvy early adopters are too spread out for the network effect to work in Google's favor. Concentration beats distribution, here.
>I don't feel that people understand what this product means for Google. Lest we forget they are an advertising company. What more rich a source of pointed advertising information than the exact purchases of their user?
Exactly. This should be huge for them. Let's bracket the fees they'd collect if this overtook credit cards as a preferred method of payment and focus solely on the data they'd acquire from consumer behaviour. This has a huge amount of potential for them, but it feels like they're doing it Wrong.
>> ...network effect to work in Google's favor What are you talking about here? What network has to exist? A person signs up, and uses it when it is available.
I dont understand what it is you think they need to be doing. Why would a small concentrated area be any better for mass adoption?
If 1 in 1000 people in a given square mile have access to Wallet, and 1 in 1000 retail outlets support it, what are the chances anyone will actually use it and give you the data you need to improve it? A far better approach would be to give it to every google employee and as many residents around Google HQ as possible, and convince as many local businesses as you can to use it, covering their costs. Then you start to get an idea of what its real-life usage cases are, and where you aren't delivering. Giving it to a smattering of technorati and having a few businesses support it isn't likely to lead to much use.
>>A far better approach would be to give it to every google employee and as many residents around Google HQ as possible
Theres not preventing this from happening, in fact that kind of is whats happening already. The announcement only covers general population rollout.
>>Giving it to a smattering of technorati and having a few businesses support it isn't likely to lead to much use.
"Giving" what, exactly? They are testing a service.
Google's not under any pressure to ship. They should have taken the time to get it right before they pushed it out the door.
This isn't some web app where you can get a few initial users off an HN or TechCrunch spike and then grow from there. It's completely useless unless a lot of people in the same area want to use it, in which case retailers will be incentivized to support it. If you want to do a limited alpha rollout, convince every store within 3 miles of 1600 Amphitheatre Parkway to carry it and give out free phones with Google Wallet enabled to 5,000 people in the area. Work out the bugs, then make a concerted effort to get everyone in the Bay Area using it. From there you can do a general rollout with support for every major credit card and national bank, plus deals with the 50 largest retailers in the country.
The level of clout needed to pull this off successfully makes Google perfectly positioned to do so. Their insistence on rolling it out as if it were a web startup all but ensures its failure.